A new report from Amazon Business sheds light on procurement trends

Effective procurement and purchasing decisions have never been more important for a wide array of industries — from health care and technology to hospitality and manufacturing.

These days, business buyers manage day-to-day purchases and play a pivotal role in long-term growth strategies and corporate responsibility initiatives. As the demands on procurement decision-makers (DMs) have become vastly more complex, they are tasked with improving efficiencies and investing in the right tools and technology for smart business buying.

A new report released by Amazon Business reveals that over half of procurement DMs expect their budgets to increase in 2024, signaling a positive shift after a period of cost reduction. Looking closely at the trends shaping business buying in the year ahead, Amazon Business’ 2024 State of Procurement Report provides valuable insights, empowering businesses to address their biggest challenges proactively.

What this year’s report revealed

For the past three years, Amazon Business has conducted an annual study about procurement. This year’s study delved into insights from 3,108 procurement DMs and C-level executives in the U.S. and key international markets in Europe, Asia and the U.K. The findings were presented in November to top procurement leaders from the public and private sectors at the Amazon Business Reshape event, held in Chicago.

The insights come at a time when businesses of all sizes are scrutinizing their sourcing and supply chain processes.

“Armed with these insights, procurement leaders have the opportunity to glean valuable lessons from their peers and reshape their organizations,” said Alexandre Gagnon, vice president of Amazon Business Worldwide. “(They can) buy smarter, dream bigger and thrive, in any economy.”

Given the added complexity of business-to-business (B2B) transactions, the study addresses a critical need, exploring the internal and external factors that impact decision-making in this demanding field with an ever-widening scope. Notably, more than half of the procurement DMs surveyed for the study (52%) were responsible for purchases across multiple locations, with almost two-thirds of that group managing procurement for different countries.

Transforming procurement through technology

In recent years, procurement DMs have confronted market fluctuations, coupled with evolving regulations and shifting supply chain issues. One of the biggest pain points to emerge from the study is the need to mitigate low-value tasks, such as data entry, and prioritize high-value tasks, such as strategic planning. The report found that more than a third (38%) of procurement DMs would like to spend less time on tasks that could be automated.

“Procurement leaders must streamline the time spent on low-value activities, like gathering information for reports, manually entering data into disparate systems and trying to contact suppliers for delivery updates,” said Aster Angagaw, vice president and head of commercial, public and strategic sector for Amazon Business.

To help address this need, Amazon Business has integrated services and features for businesses, such as insightful purchasing analytics and payment solutions.

Simplifying responsible purchasing for millions of businesses

It’s clear from the study that procurement DMs face an expanding set of considerations that go beyond mere dollars-and-cents planning. To align with corporate responsibility measures, 94% of respondents prioritize knowing the origin of products, 92% look at the HR standards of partner organizations and 90% examine the type of transportation being used, among other details.

Likewise, various industries, such as finance and health care, must also navigate changing laws and regulations in their purchasing processes. Many companies across all sectors, report that they have implemented environmental, social and governance (ESG) initiatives to improve their market image. When evaluating sustainability and diversity, equity and inclusion (DEI) practices, the weight of procurement decisions now extends to the customer experience and corporate reputation.

This is a challenging task 85% of respondents said they struggle to find suppliers that align with their sustainability goals. Amazon Business addresses this by partnering with trusted third-party certification agencies, including Carbon Neutral Certified by SCS Global Services, Bluesign and LEVEL by BIFMA, providing a simplified process for finding suppliers and increasing visibility for their millions of business customers.

“Our online purchasing tools offer user-friendly search and filter features, a platform to communicate directly with suppliers, and informational summaries for suppliers to explain key ESG information. In this way, online buying becomes a valuable resource for reducing the time and effort it takes to vet suppliers and make progress toward responsible purchasing goals,” said Chris Costello, general manager for strategic accounts at Amazon Business.

Despite the challenges, procurement leaders everywhere now have the tools to transform how they purchase goods, collaborate effectively with partners and successfully navigate risks in the year ahead.

Originally published on USA Today.